Opinion
BCD-CV-2019-42 BCD- CV-2019-41
03-08-2022
TUCKER J. CIANCHETTE, Plaintiff, v. ERIC L. CIANCHETTE ET AL., Defendants.
Eric L. Cianchette, Peggy A. Cianchette, and PET, LLC Tucker J. Cianchette Tim Norton, Esq. Kelly Remmel & Zimmerman Eric L. Cianchette, Peggy A. Cianchette, and PET, LLC Lee Bals, Esq. Marcus Cleg
Eric L. Cianchette,
Peggy A. Cianchette, and PET, LLC
Tucker J. Cianchette Tim Norton, Esq.
Kelly Remmel & Zimmerman
Eric L. Cianchette,
Peggy A. Cianchette, and PET, LLC
Lee Bals, Esq.
Marcus Cleg
COMBINED ORDER ON PENDING MOTIONS
M. Michaela Murphy, Justice.
INTRODUCTION
This is a case about fiduciary duties in the context of a family's limited liability company. Plaintiff Tucker Cianchette sues his father and stepmother, Defendants Eric and Peggy Cianchette, along with the company they co-own, PET, LLC ("PET"). Plaintiff alleges Defendants have continued to engage in the wrongful conduct for which they were held liable in an earlier suit (the "2016 Action") as well as additional wrongful conduct.
Cianchette v. Cianchette, No. CV-16-249, 2018 Me. Super. LEXIS 13 (Jan. 17, 2018), aff'd, Cianchette v. Cianchette, 2019 ME 87, 209 A.3d 745, cert. denied, 140 S.Ct. 469 (2019).
The matters presently before the Court are three motions brought by Defendants: a motion in limine to exclude the expert testimony of Mark Plourde, a motion for judgment on the pleadings as to Counts IV and IX of Plaintiff's Complaint, and a motion for summary judgment on Count I (Breach of the PET, LLC Agreement and Covenant of Good Faith and Fair Dealing), Count II (Breach of Fiduciary Duty), Count III (Damages for Diminution in Value and Lost Profits), Count V (Declaratory Judgment), Count VI (Dissociation), Count VII (Appointment of a Receiver), Count VIII (Injunctive Relief and/or Specific Performance) and Count IX (Punitive Damages) of Plaintiff's Complaint. Plaintiff opposes all motions. The Court heard oral arguments on January 21, 2022 in which both parties appeared through counsel. For the reasons discussed below, the Court DENIES the motion to exclude, GRANTS the motion for judgment on the pleadings, and DENIES the motion for summary judgment.
BACKGROUND
In June 2016, Plaintiff Tucker Cianchette sued the Defendants for, among other things, fraud, breach of contract, and breach of fiduciary duties related to the operation of PET, as well their conduct in relation to a proposed sale of their PET membership interests. The breach of fiduciary duty verdict against Peggy was founded in large part on her actions as Manager of PET. The jury found her to have artificially inflated rent paid by PET to another LLC of which she and Eric were members and to have made loans to other commonly owned LLCs while acting as Manager of PET. As a result of the 2016 Action, Tucker was awarded $5,900,000 in damages on March 5, 2018. The Law Court affirmed the judgment on June 4, 2019.
This Court entered a Combined Order in this matter on December 16, 2019 in which it held that the PET LLC Agreement permits Defendants to initiate a "capital transaction" in the form of a merger with another LLC which they own. Cianchette v. Cianchette, No. BCD-CV-2019-42 (Bus. &Consumer Ct. Dec. 16, 2019, Murphy, J.) (order denying motion to dismiss or for a more definite statement). In particular, the Court stated that "Defendants' proposed valuation of PET, transfer of its assets (via sale or cash-out merger), and provision of cash distributions to its members qualifies as a capital transaction as defined by Section 4.4. of the PET LLC Agreement." Id. at 8. However, this Court continued that it "does not herein express any opinion about the execution of this procedure, nor as to any breach of duty by either party that could arise as part of the process." Id. Additionally, this Court denied Defendants' motion to dismiss because it concluded that Tucker had alleged the continuation of the same wrongful actions litigated in the 2016 Action, plus additional wrongful actions not litigated at that time, meaning res judicata does not apply. Id. at 8-10.
In March 2020, this Court declined to decide as a matter of law whether that capital transaction, or merger, was effective. Cianchette v. Cianchette, No. BCD-CV-2019-42 (Bus. &Consumer Ct. March 12, 2020, Murphy, J.) (order denying motion to strike and to establish effective date of capital transaction).
In June 2021, this Court addressed cross motions for summary judgment. It held there existed genuine issues of material fact as to the validity and enforceability of the merger between PET and Better Way Ford and that Defendants would not be entitled to summary judgment even if a merger was permissible under the LLC. It also held Peggy and Eric failed to establish a prima facie case for intentional infliction of emotional distress, that Tucker was not liable for defamation, and that Peggy and Eric had not sufficiently supported their counterclaims as to violations of 18 U.S.C. § 1836 and the Uniform Trade Secrets Act. Cianchette v. Cianchette, No. BCD-CV-201942 (Bus. &Consumer Ct. June 28, 2021, Murphy, J.) (order denying and granting cross motions for summary judgment).
FACTUAL ALLEGATIONS
The following facts, which are undisputed unless otherwise noted, have been drawn from Defendants Eric L. Cianchette, Peggy A. Cianchette, and PET, LLC's Statement of Material Facts, and Plaintiff Tucker J. Cianchette's Statement of Additional Material Facts. PET was formed in 2013 for the purpose of acquiring the assets of Casco Bay Ford and operating it as a car dealership with owner interests distributed between its Members, namely Tucker (33%), Peggy (33%), and Eric (34%). (Defs.' Supp'g S.M.F. ¶¶ 1-2.) The PET Operating Agreement (the "Operating Agreement") was created by Defendant Peggy with the aid of the company's attorney. (Pl.'s Opp'g S.M.F. ¶ 1.) Peggy has been the Manager of PET since that entity's creation. (Opp'g S.M.F. ¶ 27.)
Tucker created the opportunity for PET to purchase the dealership through his relationship with Casco Bay Ford's previous owner, Art McLeod. (Pl.'s Opp'g S.M.F. ¶ 2; Defs.' Resp. to Opp'g S.M.F. ¶ 2.) Tucker brought his previous experience in the auto industry to PET. (Opp'g S.M.F. ¶ 3.) Eric provided the initial funding for the purchase of Casco Bay Ford, while Peggy brought neither funds nor experience. (Opp'g S.M.F. ¶ 4.) At the creation of PET, the parties intended for Tucker to eventually buy out Peggy and Eric by paying them what they had put in to purchase the dealership such that Tucker would remain the sole owner of PET and therefore of Casco Bay Ford. (Opp'g S.M.F. ¶ 5, 39; Defs.' Resp. S.M.F. ¶ 39.) However, when Tucker attempted in 2015 to purchase Defendants' interests in PET, they presented him with documents prepared by Tucker's brother, an attorney, such that should Tucker fail to purchase Peggy and Eric's interests he would forfeit his own interest in the dealership or otherwise end the negotiations. (Opp'g S.M.F. ¶ 6.) Eric knew and intended that Tucker's failure to purchase his and Peggy's interests would result in Tucker's loss of a nonrefundable $150,000 deposit and that such a loss would be financially painful. (Opp'g S.M.F. ¶ 8; Defs.' Resp. S.M.F. ¶ 8.) Eric and Peggy sought to end their business relationship with Tucker, citing a need to "move on" via a "business divorce." (Defs.' Resp. S.M.F. ¶ 10.)
Tucker filed suit against Defendants in 2016 (the "2016 Action") alleging, inter alia, that Peggy had caused PET to pay $65,000 per month in rent, double the alleged market rate; Peggy had improperly caused PET to make a $375,000 interest-free loan to Cianchette Family, LLC without PET's members' consent; Eric and Peggy had breached the PET LLC Agreement by causing their accountants to reduce Plaintiff's membership profits for 2014; and Eric and Peggy had failed to close on the Membership P&S as defined in the Complaint. (Supp'g S.M.F. ¶ 4.) The jury in that case found, inter alia, that Eric and Peggy breached contracts with Tucker, that Eric and Peggy were liable to Tucker for claims of fraudulent misrepresentation and breach of the PET Operating Agreement, and that Peggy was liable to Tucker for breaching her duty of good faith and fair dealing as Manager of PET. (Opp'g S.M.F. ¶ 11.) Eric has stated the 2016 Action was a "farce" of a "kangaroo court" and Peggy believes that because the jury was "wrong," there was no need for her to change her conduct based on the jury's verdict. (Opp'g S.M.F. ¶ 12.) After the 2016 Action, Tucker had no power over decisions made at Casco Bay Ford, but his threats of litigation hindered Peggy's business decisions. (Opp'g S.M.F. ¶ 14; Defs.' Resp. S.M.F. ¶ 14.)
In 2019, following the payment of the judgment from the 2016 Action, Peggy and Eric desired to remove Tucker from PET and sever their business ties with him. (Opp'g S.M.F. ¶¶ 1516; Defs.' Resp. S.M.F. ¶¶ 15-16.) As such, they turned to their attorneys to find a way to eliminate his ownership interest. (Opp'g S.M.F. ¶ 17.) The resulting plan was a structure for a merger (the "Merger") based on a valuation which calculated, after capital accounts are reconciled and repaid, that Tucker would be due nothing for his ownership interest. (Opp'g S.M.F. ¶¶ 18, 34.) The Merger was described as just a "paperwork exercise" and Peggy recognized that it would result in no consideration paid to PET, no liquidation of PET assets, a creation of a new entity which is effectively identical to PET, and that the only substantive change would be that Tucker is no longer a Member. (Opp'g S.M.F. ¶ 19.) Eric and Peggy have no interest in selling Casco Bay Ford and believe it will continue to generate them profit under their ownership. (Opp'g S.M.F. ¶¶ 21-22.) Tucker, Eric, and Peggy purchased the dealership through PET for approximately $5,300,000 in 2013. (Opp'g S.M.F. ¶ 44.) The current value of the dealership has been appraised at approximately $3,208,000, net of Member Loans and other debts. (Opp'g S.M.F. ¶ 43; Defs.'Opp'g S.M.F. ¶ 43-44.) Peggy, as sole Manager of PET, never spoke to the individual responsible for valuation. (Opp'g S.M.F. ¶ 77.) Eric and Peggy stated they would not be willing to sell it even at the value set by the appraiser. (Opp'g S.M.F. ¶ 23, 45-46.)
From December 2013 through the beginning of 2016, Tucker served as General Manager of Casco Bay Ford. (Opp'g S.M.F. ¶ 26.) Wendy Ayotte was employed as the Executive Director of Operations. (Supp'g S.M.F. ¶ 18.) Eric attempted to fire Tucker as General Manager in early 2016, though he lacked the authority to do so. (Opp'g S.M.F. ¶ 28; Defs.' Resp. S.M.F. ¶ 28.) While Tucker was General Manager, Casco Bay Ford produced gross income for PET of $40,747,144 and $501,578,438 in 2014 and 2015, respectively, and net profits of $507,357 and $1,605,962 for the same. (Opp'g S.M.F. ¶ 29.) After Tucker exited his position in 2017, management duties were provided by ELC, Inc. ("ELC"), a company owned by Eric, which now also serves the role of Executive Director of Operations. (Defs.' Reply to Pl.'s Resp. S.M.F. ¶ 19; Supp'g S.M.F. ¶¶ 20-21.) PET paid ELC $250,000 in 2018 and $258,000 in 2019 as a management fee. (Supp'g S.M.F. ¶ 22.)
Michael Cianchette and Samuel Brown, employed by ELC, do not have physical offices at Casco Bay Ford. (Opp'g S.M.F. ¶ 59.) Brown considers himself to work for Casco Bay Ford. (Defs.' Resp. S.M.F. ¶ 69.) Michael Cianchette stops by the dealership three or four times a week for roughly twenty minutes per visit and Brown visits the dealership most Tuesdays and a few times at year end to meet with accountants. (Opp'g S.M.F. ¶¶ 60-61.) ELC pays Michael Cianchette a salary of approximately $150,000 and Brown a salary of approximately $140,000. (Defs.' Resp. S.M.F. ¶ 62.) PET has never paid, allocated, or expensed any amount of compensation to the dealer-principal. (Supp'g S.M.F. ¶ 27.)
After Tucker departed and ELC, represented by Michael Cianchette, took over management duties, gross income was $52,346,355 and $55,228,839 in 2016 and 2017, respectively, with net profits of $346,300 and $42,925 for the same. (Opp'g S.M.F. ¶ 32.) Despite the 96.7% drop in net profit from Tucker's final year as General Manager and Michael's first full year in control in 2017, Peggy did not consider replacing Michael in his management role. (Opp'g S.M.F. ¶ 33.) She does not believe these years of poor performance are a fair representation of the dealership's earning potential. (Opp'g S.M.F. ¶ 47.)
Peggy understands that it is her responsibility to calculate and issue annual distributions as required by section 4.1.2 of the LLC Operating Agreement. (Opp'g S.M.F. ¶ 78.) She did not do an analysis of whether there should be an annual distribution of cash flow but rather handed the task over to the accountants. (Opp'g S.M.F. ¶ 79; Defs.' Resp. S.M.F. ¶ 79.) In 2019, cash flow was at least equal to the $831,000 company net profit. (Opp'g S.M.F. ¶ 80; Defs.' S.M.F. ¶ 80.)
For the year 2016, Peggy established a reserve of $100,000 which she now agrees was not necessary. (Opp'g S.M.F. ¶ 82.)
As originally constructed and presented to this Court, Peggy and Eric planned to have the Merger effective as of September 30, 2019. (Opp'g S.M.F. ¶ 35.) In 2019, PET's gross income was $59,797,481 and its net profit was $717,595, representing a 1,339% increase over the net profit in 2018, and in 2020, after Tucker's planned exit, PET's gross income and net profit again increased to $59,519,876 and $1,439,528, respectively. (Opp'g S.M.F. ¶¶ 36-37.) Per the Merger structure, these profits and any appreciation of value of the business belong solely to Peggy and Eric, not Tucker. (Opp'g S.M.F. ¶ 38.) Nevertheless, Peggy stated she believes the Merger was in Tucker's best interest. (Opp'g S.M.F. ¶ 40.) Eric stated he wants nothing to do with Tucker and that he does not care what happens to him. (Opp'g S.M.F. ¶ 41.)
Plaintiff designated Wendy Ayotte, Corey Vargo, and Steve Hewitt as experts to testify about alleged "errors and inconsistencies" between PET's business records and the trial balances which emerged from the 2016 Action. (Supp'g S.M.F. ¶ 7.) Ayotte was retained to look for discrepancies in PET's financial statements as compared to what she saw when employed by PET but does not otherwise hold expert opinions. (Supp'g S.M.F. ¶ 8.) Vargo holds the opinion that errors were made in the reporting of capital account income and expense allocation. (Supp'g S.M.F. ¶ 9.) Hewitt will offer his opinion as to PET's financial performance compared to industry averages. (Supp'g S.M.F. ¶10.) In Tucker's Affidavit, he states "substantial payments" were made to certain insiders and names ten areas of payment. (Supp'g S.M.F. ¶ 11.)
Defendants retained BerryDunn on or about June 23, 2018 to analyze and provide opinions as to fair market rent for Casco Bay Ford, appropriate management fees, and appropriate working capital levels and capital reserves (the "BerryDunn Opinion). (Supp'g S.M.F. ¶13.) BerryDunn recommended that PET pay a yearly management fee of $258,000. (Supp'g S.M.F. ¶17.) Tucker believes the BerryDunn Opinion is unfair and offers competing evidence from his experts, Mark Filler, Mark Plourde, and Steve Hewitt. (Pl.'s Resp. S.M.F. ¶ 15.) Tucker has not spoken to any representative of BerryDunn nor does he have knowledge of conversations between BerryDunn and Defendants or their counsel. (Supp'g S.M.F. ¶ 16.)
PET rented the Casco Bay Ford premises from its landlord, Cianchette Family, LLC, and the lease between these entities (the "Lease") described the premises as containing 16,180 square feet. (Supp'g S.M.F. ¶ 28.) By its terms, the Lease expired on January 1, 2019 and PET exercised its renewal option, which renewed the Lease on the same terms and conditions "except for current market rent conditions." (Supp'g S.M.F. ¶¶ 29-31.) Tucker was willing to discuss allowing a third party to analyze such conditions to determine the new rent. (Supp'g S.M.F. ¶ 32.) In the BerryDunn Opinion, BerryDunn concluded that the fair market rent for the property was $687,900 per year. (Supp'g S.M.F. ¶ 33.)
After the 2016 Action and prior to April 3, 2020, Cianchette Family, LLC, the landlord under the Lease, directed all rent due pursuant to the Lease to be paid to Top of Exchange, LLC ("Top of Exchange.") (Supp'g S.M.F. ¶¶ 49-50.) Part of the damages awarded to Tucker in the 2016 Action included compensation for his claim Peggy had caused PET to pay $65,000 per month in rent alone, which is in excess of the face amount required by the Lease. (Supp'g S.M.F. ¶ 73.) The verdict did not specify whether these damages included sums for breach of fiduciary duty related to rent payments beyond February 2018. (Resp. S.M.F. ¶ 73; Defs.' Obj. ¶ 73.) After the 2016 Action, PET continues to pay $65,000 per month. (Pl.'s Resp. S.M.F. ¶ 74; Opp'g S.M.F. ¶¶ 55-56.) The parties dispute whether this payment represents rent alone or both rent due to Top of Exchange and management fees due to ELC. (Supp'g S.M.F.¶¶ 50; Pl.'s Resp. S.M.F. ¶¶ 49-50; Opp'g S.M.F. ¶¶ 55-56; Defs.' Resp. S.M.F. ¶¶ 55-56.)
On January 1, 2017 PET executed and delivered a Promissory Note to Peggy and Eric in the original principal amount of $1,121,233 (the "2017 Member Loan"). (Supp'g S.M.F. ¶ 37.) Pursuant to this Note, Defendants Peggy and Eric had the right to receive interest but prior to the 2016 Action interest had not accrued or been paid on any Member Loans because Defendants Peggy and Eric had agreed to forego charging interest in return for increased rent payments. (Supp'g S.M.F. ¶ 38.) After Plaintiff successfully argued in the 2016 Action that Peggy had breached her fiduciary duty by paying $65,000 per month in rent, Peggy and Eric wished to accrue and receive interest on Member Loans. (Supp'g S.M.F. ¶ 39; Resp. S.M.F. ¶ 39.) The BerryDunn Opinion as to interest is limited to recommendations about interest on loans made after January 2019 and expresses no opinion on interest on prior loans. (Supp'g S.M.F. ¶ 36.)
Advertising decisions at Casco Bay Ford are primarily made by John Litwinetz, the General Sales Manager, in consultation with the Creative Broadcast Company, seeking to maximize profitability. (Supp'g S.M.F. ¶ 40.) Litwinetz meets with Samuel Brown, ELC's Chief Financial Officer, during the budgeting process to review advertising expenditures and to draw a budget for the upcoming year. (Supp'g S.M.F. ¶ 41.) Neither Litwinetz nor Brown are related to the Cianchette family. (Supp'g S.M.F. ¶ 42.)
PET pays Erik's Church, a country music bar owned by Peggy and Eric's son Kenneth Cianchette, $2,000 per month to be a stage sponsor. (Supp'g S.M.F. ¶ 43.) Casco Bay Ford does not have any similar sponsorship arrangements with other businesses. (Opp'g S.M.F. ¶ 86.) Kenneth Cianchette approached Litwinetz about this arrangement and based the value of the sponsorship on a similar package established by radio station 99.9 The Wolf. (Supp'g S.M.F. ¶ 44.) Casco Bay Ford cannot reliably state how many customers have been generated by this sponsorship or determine its financial value to the dealership. (Opp'g S.M.F. ¶ 85.) Peggy was not involved in the sponsorship negotiations. (Supp'g S.M.F. ¶ 46.) Peggy did loan Erik's Church approximately $350,000-$400,000, per Kenneth's memory. (Opp'g S.M.F. ¶ 83.)
The cited opposing statement of material facts incorrectly references Defendants' Statement of Material Facts Exhibit O as support; the proper citation is Exhibit P to the same.
Casco Bay Ford's office manager is Roberta Solerno, who has review authority over all checks written by PET. (Supp'g S.M.F. ¶ 53.) Virtually every check written by PET is backed up by an invoice or other record. (Supp'g S.M.F. ¶ 54; Opp'g S.M.F. ¶ 66.) Solerno has never seen an invoice from ELC that she believed was questionable. (Supp'g S.M.F. ¶ 55.) Solerno does not ask any questions about the purpose of checks when asked to write them by the dealership's owners. (Opp'g S.M.F. ¶ 67.)
Jack Rayers is Peggy and Eric's son-in-law and worked for ELC and provided IT services to Casco Bay Ford. (Supp'g S.M.F. ¶¶ 56-57.) Rayers almost exclusively performed IT services for Casco Bay Ford, but still tracked his time and reported it to ELC, which would in turn invoice Casco Bay Ford at Rayers' hourly rate. (Supp'g S.M.F. ¶ 58.) The BerryDunn Opinion states that a non-employee who serves as both IT systems manager and website manager should be paid $81,000 per annum and that the amount paid as a management fee should be increased by this amount if the services were provided through a management agreement. (Supp'g S.M.F. ¶ 59.)
Many car dealers have switched from using a manufacturer warranty program, i.e., a quotes retro program, to creating their own insurance companies, i.e., reinsurance companies. (Opp'g S.M.F. ¶ 68.) In a reinsurance program, a company forms another company which insures the products the first company sells, such as extended service plans in the case of car dealerships. (Opp'g S.M.F. ¶ 70.) In September 2018 Brown asked Casco Bay Ford's accountants for information about contacts through which the dealership might form a reinsurance program and was given the name of Bob Hunter. (Opp'g S.M.F. ¶ 69.) Through Hunter, Casco Bay Ford set up reinsurance "risk pools" which are transferred to a separate company owned by Peggy and Eric. (Opp'g S.M.F. ¶ 71.) Casco Bay Ford has no formal connection to any reinsurance company and the financial activity of the company participating in the reinsurance pool does not run through Casco Bay Ford. (Supp'g S.M.F. ¶ 62.) From December 2017 to May 2020, Casco Bay Ford made payments on extended warranty contracts to reinsurance companies owned by Hunter or Peggy and Eric of $670,622.91. (Opp'g S.M.F. ¶ 72.)
Casco Bay Ford operates a commercial truck facility in Freeport, Maine on land owned by CF Cousins River, LLC, a real estate holding company owned by Eric and Tucker's siblings. (Supp'g S.M.F. ¶ 63; Opp'g S.M.F. ¶ 74.) Michael Cianchette kept no records of his calculations of the expected profitability of the facility. (Opp'g S.M.F. ¶ 76; Defs.' S.M.F. ¶ 76.) No rent was paid in connection with this truck center until 2021, after PET had merged with Better Way Ford, LLC ("Better Way Ford"). (Supp'g S.M.F. ¶ 65.) During the 2016 Action, Tucker argued that Peggy breached her fiduciary duties by causing PET to make a loan to CF Cousins River (the "CF Loan") while at the same time she and Defendant Eric had a $1.1 million promissory note from Casco Bay Ford paying them 4.5% interest. (Supp'g S.M.F. ¶ 66; Defs.' Obj. ¶ 66.) The court in the 2016 Action agreed that the interest rate Peggy and Eric were entitled to receive on their loans should be imputed to the CF Loan. (Supp'g S.M.F. ¶ 67.) Tucker's claims in the instant action related to the CF Loan include, at a minimum, that the loan has not been repaid. (Supp'g S.M.F. ¶ 75.) In the 2016 Action, Tucker did not request any equitable remedy related to the CF Loan following the return of the jury verdict. (Supp'g S.M.F. ¶ 76.)
Since December 9, 2013, when PET acquired the assets of Casco Bay Ford, PET's balance sheet has reflected a loan from Peggy and Eric to PET in the amount of $1,769,579 (the "2013 Member Loan"). (Supp'g S.M.F. ¶ 68.) Tucker communicated with his attorney and accountant regarding the treatment of the 2013 Member Loan prior to the execution and delivery of the Membership P&S. (Supp'g S.M.F. ¶ 69.) Though this loan was defined as a Loan in the Membership P&S, it was the intent of the Members to convert, at closing, the loan to equity and therefore charge no interest. (Supp'g S.M.F. ¶ 70; Resp. S.M.F. ¶¶ 70-71.)
During the 2016 Action, the court entered judgment in favor of Defendants on issues relating to the allegedly disproportionate allocation on income and profit to Tucker in 2014 because Tucker agreed he had presented no evidence to substantiate his claims. (Supp'g S.M.F. ¶ 72.)
Tucker has designated Mark Filler as an expert on diminution in value damages and Filler will provide his opinion as to the valuation of PET on a "fair value basis." (Supp'g S.M.F. ¶ 77.) Filler's opinion includes testimony about potential valuation and profits in the absence of the merger. (Supp'g S.M.F. ¶ 78; Resp. S.M.F. ¶ 78.)
Peggy asserts she has no ill will towards Plaintiff, believes it was in the best interests of all Members of PET to end their business relationship, wants to pay him his fair share of the Merger and that the Merger was not executed with the intent to harm him. (Supp'g S.M.F. ¶ 80.) Tucker has contributed virtually no cash to PET while Eric has contributed several million dollars, though Tucker did bring Defendants the opportunity to purchase Casco Bay Ford in the first place and achieved record profits while serving as General Manager and Dealer Principle between 2013 and 2016. (Supp'g S.M.F. ¶ 82; Resp. S.M.F. ¶ 82.) Tucker received more than $700,000 in distributions from PET between 2014 and 2019 but did not receive a distribution in 2019. (Supp'g S.M.F. ¶ 83; Opp'g S.M.F. ¶ 81.)
Plaintiff's opposing statement of material fact cites the Tucker Affidavit for support incorrectly as Exhibit M; it is located at Exhibit G.
Tucker's Complaint in the instant action includes, at a minimum, claims and causes of action based on (i) the reasons why the Merger of PET into Better Way Ford was unfair to him; (ii) that any vote by Peggy and Eric as Members to proceed with the Merger would be a breach of their duties to him; and (iii) that the Merger could only be authorized at a formal meeting of the Members. (Supp'g S.M.F. ¶ 79.)
DISCUSSION
I. Defendants' Motion to Exclude
Defendants move to exclude the testimony of Tucker's expert Mark Plourde, who was deposed on the subject of market rent for the property at which Casco Bay Ford operates. Tucker holds this opinion out as relevant because of the significant factual issues in this case relating to the proper valuation of PET and of the real estate Casco Bay Ford is located on. Expert testimony may be offered where it is relevant under the Maine Rules of Evidence, Searles v. Fleetwood Homes of Penn., Inc., 2005 ME 94, ¶ 21, 878 A.2d 509, meaning where it both has "any tendency to make a fact more or less probable" and "is of consequence in determining the action." M.R. Evid. 401.
Defendants argue that there are only three dates related to the fair market rent of the dealership which are relevant to any of Tucker's claims: (i) January 1, 2019; (ii) September 30, 2019; and (iii) April 3, 2020, and that Plourde's opinion only pertains to fair market rent on August 13, 2020, rendering it irrelevant and thus inadmissible under Rule 401. January 1, 2019 is the date upon which the first five-year term of the lease between PET, as tenant, and Cianchette Family, LLC, as landlord, ended. PET had the right to renew for a second five-year term on the same terms as the first lease except for current market rent conditions, which it did. September 30, 2019 is the date which the Plan of Merger between PET and Better Way Ford indicated as the date upon which PET was to be valued. April 3, 2020 is the date upon which the Plan of Merger was filed with the Maine Secretary of State and the date upon which Defendants contend the Merger was effective.
Plourde testified at his deposition that his opinion pertained only to August 13, 2020. (Plourde Dep. 97-98.) Defendants argue it cannot be relevant for any pre-COVID-19 dates or April 3, 2020 because of the economic uncertainty and turmoil which resulted from the pandemic in the spring of 2020. However, Plourde's opinion is based in part on an earlier, pre-COVID appraisal. Additionally, it could tend to make it more probable that Tucker's allegation about rent overpayment is true, depending on credibility determinations made a factfinder.
Defendants' arguments as to the role the COVID-19 pandemic may have played in causing economic uncertainty and thereby affecting Plourde's ability to accurately appraise the fair market rent are not persuasive as a basis for exclusion of his testimony; it is the role of the factfinder to determine whether his opinion is credible given this uncertainty. Evidence will only be excluded under Rule 401 where it lacks any tendency to prove or disprove a fact; mere attenuation of that tendency is insufficient for exclusion.
II. Defendants' Motion for Judgment on the Pleadings
Defendants move for judgment in their favor on Count IV (Civil Conspiracy) and in Eric's favor on Count IX (Punitive Damages) under Rule 12(c) of the Maine Rules of Civil Procedure. Rule 12(c) permits any party to move for judgment on the pleadings after pleadings are closed so long as the motion does not delay the trial. For the purposes of this motion, the Court assumes the factual allegations in the Plaintiff's Complaint are true and determines, viewing the Complaint in the light most favorable to the Plaintiff, whether it alleges a cause of action entitling the Plaintiff to relief on any legal theory. See Cunningham v. Haza, 538 A.2d 265, 267 (Me. 1988).
A. Count IV
Tucker alleges in Count IV, a claim for civil conspiracy, the following, in addition to repeating and realleging the prior paragraphs:
48. Eric and Peggy, personally and through individuals and entities they directed and controlled, developed a common plan or design to engage in tortious acts, including but not limited to depriving Tucker of the fair value of his ownership interest in PET.
49. As a result of Eric and Peggy's concerted conduct and planning, the tortious acts of each are legally attributable to the other. Thus Eric and Peggy are vicariously liable for the other's tortious acts, including but not limited to breach of fiduciary duty.(Pl.'s Compl. ¶¶ 48-49.) In Meridian Medical Systems, LLC v. Epix Therapeutics, Inc., issued after the filing of the instant Complaint, the Law Court explains that "under Maine law, there is no tort for 'conspiracy.'" 2021 ME 24, ¶ 10, 250 A.3d 122. Civil liability stems only from the commission of an independent tort and though a party may additionally be liable for conspiracy in connection with that tort, conspiracy cannot stand alone. See Cohen v. Bowdoin, 288 A.2d 106, 110 (Me. 1972.) On the face of the Complaint, Tucker has not alleged an independent tort.
Tucker did not move to amend the Complaint, timely or otherwise, in light of Meridian's clear statement on a plaintiff's inability to state a claim for conspiracy as an independent tort. Instead, Tucker attempts to re-characterize Count IV as based on a claim of aiding and abetting, namely Eric's assistance in Peggy's alleged breach of fiduciary duty, via the totality of the preceding allegations as incorporated into this Count. However, Meridian also states that not only does notice pleading require factual allegations meeting each element of a claim, a plaintiff stating a claim for aiding and abetting "must allege with specificity that the defendant had actual knowledge that the principal tortfeasor was committing a breach of fiduciary duty and that the defendant performed substantial acts to assist in the commission of that tort." 2021 ME 24, ¶ 28, 250 A.3d 122. In oral arguments, counsel pointed to paragraphs nine through fifteen of the Complaint as stating, "on information and belief," that Eric and Peggy worked together, that they conspired together, and that Peggy acted with Eric's assistance and direction. (Pl.'s Compl. ¶¶ 915.) Neither in these paragraphs nor elsewhere in the Complaint does he plead with specificity that Eric had actual knowledge Peggy was committing a breach of fiduciary duties. These vague, conclusory allegations are insufficient to support a claim for aiding and abetting and Count IV fails as a matter of law.
B. Count IX
Count IX seeks punitive damages against Eric and Peggy. However, because Count IV is the only tort count against Eric and this Court finds it fails, Count IX must fail as to Eric as well. Tucker asserts that outside of punitive damages for a tort, Eric is also subject to punitive damages for his own breach of an implied fiduciary duty. The Maine LLC Act states that "a member not involved in the management of a limited liability company does not have a fiduciary duty to the limited liability company, or to any other member, or to another person that is a party to or is otherwise bound by a limited liability company agreement, solely by reason of being a member." 31 M.R.S. 1559(3). This statute is subject to section 1521, subsection 3, paragraph A, which provides that to the extent a member or other person in an LLC has fiduciary duties, those duties may be modified or eliminated in a written LLC agreement, save that the implied contractual covenant of good faith and fair dealing may not be eliminated. 31 M.R.S. § 1521(3)(A). The covenant of good faith and fair dealing sounds in contract, not in tort, so it does not create fiduciary duties and damages must be pursued as part of a breach of contract claim. See Nisbet v. Harp Invs., 2018 Me. Super. LEXIS 89, *9 (Me. Bus. &Consumer Ct. Dec. 4, 2018). The PET LLC Agreement does not impose fiduciary duties on non-Manager members, so the default rule applies, and Eric has no implied fiduciary duty to breach.
III. Defendants' Motion for Summary Judgment
A. Standard of Review
Summary judgment is appropriate where the parties' statements of material fact and the portions of the record referenced therein "disclose no genuine issues of material fact and reveal that one party is entitled to judgment as a matter of law." Currie v. Indus. Sec., Inc., 2007 ME 12, ¶ 11, 915 A.2d 400. "A material fact is one that can affect the outcome of the case, and there is a genuine issue when there is sufficient evidence for a fact finder to choose between competing versions of the fact." Lougee Conservancy v. CitiMortgage, Inc., 2012 ME 103, ¶ 11, 48 A.3d 774 (quoting Stewart-Dore v. Webber Hosp. Ass'n, 2011 ME 26, ¶ 8, 13 A.3d 773). The Court must view a party's statements of material fact in the light most favorable to the non-movant and draw all reasonable inferences in favor of the same. Watt v. UniFirst Corp., 2009 ME 47, ¶ 21, 969 A.2d 897. However, a party may not "rely on conclusory allegations or unsubstantiated denials, but must identify specific facts derived from the pleadings, depositions, answers to interrogatories, admissions and affidavits to demonstrate either the existence or absence . . . of a fact." Kenny v. Dep't of Human Servs., 1999 ME 158, ¶ 3, 740 A.2d 560. A party who moves for summary judgment is entitled to judgment only if the party opposed to the motion, in response, fails to submit "enough evidence to allow the fact-trier to infer the fact at issue and rule in the party's favor." Lougee Conservancy, 2012 ME 103, ¶ 12, 48 A.3d 774.
Limited liability companies are governed by the Maine Limited Liability Company Act (the "LLC Act"). 31 M.R.S. §§ 1501-1693. Under § 1507 of the LLC Act, "principles of freedom of contract and. . . the enforceability of limited liability company agreements" are given primary consideration. Under § 1521(3), duties owed by members and other persons, such as fiduciary and contractual duties, may be "expanded or restricted or eliminated" by the LLC agreement save for the "implied contractual covenant of good faith and fair dealing," which cannot be eliminated.
B. Analysis
Plaintiff Tucker Cianchette asserts claims both against Defendant Peggy Cianchette in her capacity as Manager of PET and against Defendants Peggy and Eric Cianchette in their capacities as Members of PET. In Count I, Tucker asserts Peggy and Eric breached the PET LLC Agreement and the covenant of good faith and fair dealing; in Count II, that Peggy breached her fiduciary duties as manager of PET; and in Count III, that Peggy and Eric are liable for a loss in income and a loss in value of the enterprise. Further, Tucker also asserts claims in Count V that he is entitled to a declaratory judgment that Peggy's allegedly self-dealing actions undertaken in violation of the PET Agreement are void; in Count VI, that Peggy and Eric should be dissociated from PET under 31 M.R.S. § 1582 and penalized under § 1583; in Count VII, that this Court should appoint a receiver to manage PET; in Count VIII, for injunctive relief; and in Count IX, for punitive damages.
Preliminarily, this Court must address whether res judicata bars any issues, whether the validity of the Merger is subject to the instant Complaint, and whether the business judgment rule shields Peggy from Tucker's allegations.
The doctrine of res judicata consists of two concepts: issue preclusion and claim preclusion. Pearson v. Wendell, 2015 ME 136, ¶ 23, 12S A.3d 1149. While issue preclusion, or collateral estoppel, prevents the re-litigation of factual issues already decided in a prior case, claim preclusion prevents the litigation of claims that were, or could have been, litigated in a prior case. Town of Mt. Vernon v. Landherr, 2018 ME 105, ¶ 15, 190 A.3d 249; Portland Water Dist. v. Town of Standish, 2008 ME 23, ¶ 8, 940 A.2d 1097. To determine whether a claim raised in a subsequent action is barred by claim preclusion, Maine utilizes a transaction test whereby the Court examines "the aggregate of connected operative facts that can be handled together for purposes of trial to determine if they were founded upon the same transaction, arose out of the same nucleus of operative facts, and ought redress for essentially the same basic wrong." Portland Water Dist., 2008 ME 23, ¶ 8, 940 A.2d 1097.
Defendants assert summary judgment should be granted, on the basis of res judicata, in their favor on any claims premised on issues or claims involved in the 2016 Action. There is no dispute that Tucker and the Defendants were both parties to the 2016 Action. Peggy and Eric argue that claims "premised on re-characterizing the Member Loans as equity" should be subject to summary judgment due to judicial estoppel. (Defs.' Mot. 27.) In the 2016 Action, Tucker argued that taking an interest-free loan violates the LLC Agreement requirement that insider transactions be at arms-length and commercially reasonable. (Opp'g S.M.F. ¶ 66.) In that case, at issue was the proper interest rate for determining damages for Defendants' failure to charge interest on the CF Loan, not whether the loan itself was appropriate. Here, Tucker's claims relate to his allegations that Peggy and Eric are attempting to circumvent the prohibition on payment of interest on PET Capital Contributions under sections 3.3 and 3.5 of the LLC Agreement by substituting an interestbearing promissory note for their capital contributions. Tucker alleges this is relevant to the valuation methodology used by PET and its expert witnesses, which relates to the validity of the execution of the Merger. The current characterization of the Member Loans is thus a question of fact relevant to the issues in the instant action and is not barred by res judicata.
As to claims relating to the CF Loan and excessive rent, Tucker alleges that PET has continued its wrongful acts as held in the verdict of the 2016 Action. Defendants counter that the monthly "rent" payments, though nominally the same amount as before, now include both rent and management fees and therefore rent has been reduced. Whether this is true is an issue of fact, as is whether Defendants have continued the wrongful acts related to the CF Loan for which they were held liable in the 2016 Action. Res judicata cannot as a matter of law shield Peggy and Eric from allegations of continued wrongful conduct since the previous suit.
The Defendants also question whether Tucker's Complaint states a claim related to the Merger, which had not occurred at the time the Complaint was filed. However, the Complaint does explicitly reference the then-proposed "capital transaction" whereby Peggy and Eric would "withdraw their capital from [PET]" in paragraphs thirty-three through thirty-five as one of the alleged wrongful acts in regard to capital contributions. Tucker alleges Peggy and Eric planned to merge PET with one of Eric's companies in order to terminate his ownership interest in Casco Bay Ford. New events which occur after a complaint is filed but which fall under claims already pleaded should be considered as part of the complaint. See Napp v. Parks, 2007 ME 126, ¶ 22, 932 A.2d 531. Peggy and Eric ultimately did precisely what Tucker alleged they planned to do in his initial Complaint and thus the execution of that "capital transaction" is part of this case. In its June 2021 Combined Order, this Court declined to grant summary judgment on the validity of the execution of that merger. Cianchette, No. BCD-CV-2019-42 (Bus. &Consumer Ct. June 28, 2021, Murphy, J.). Questions of fact remain as to Peggy and Eric's motives for pursuing the Merger, the valuation of PET, the reasonableness of the transaction, the distribution calculation, and the value of Tucker's ownership interest. Defendants argue that the capital transaction process through which the Merger was carried out is formulaic under the PET Operating Agreement, but they were the ones who supplied the figures for that formula and Tucker brings evidence challenging the accuracy of their valuation.
As for the application of the business judgment rule, differing "business philosophies" among LLC members do not rise to the level of a breach of fiduciary duty and business decisions are protected from judicial review unless any "allegedly harmful conduct was primarily motivated by fraud or bad faith." Meridian v. Med. Sys., LLC v. Epix Therapeutics, Inc., 2021 ME 24, ¶ 37, 250 A.3d 122 (quoting Rosenthal v. Rosenthal, 543 A.2d 348, 353 (Me. 1988)). This protection only exists absent a showing of "sufficient" bad faith, which could be demonstrated by a breach of fiduciary duty. Id. The plaintiff must allege facts allowing the court to find such bad faith; conclusory assertions are insufficient. Sunspray Condo Ass'n, 2013 ME 19, ¶¶ 15-16, 61 A.3d 1249.
Because the LLC Agreement does not provide for the duties of Members to one another, the LLC Act defines these duties. 31 M.R.S. § 1512(2). Under § 1512(4), Members are not liable to each other if they relied in good faith on the LLC Agreement, and under § 1559(2), a Member cannot "be held personally liable for money damages for failure to discharge any duty unless the member. . . is found not to have acted honestly or in the reasonable belief that the action was in or not opposed to the best interests of the limited liability company or its members." Relatedly, under Maine law, LLC members owe a duty of good faith and fair dealing to each other which cannot be eliminated in the LLC agreement. 31 M.R.S. § 1521(3)(A).
Tucker has alleged numerous facts which could support a finding of a breach of fiduciary duty or otherwise supporting an inference of bad faith. As such, the business judgment rule, assuming arguendo Meridian's implication that it applies to LLC members is accurate, does not as a matter of law prevent claims based upon Peggy's actions as Manager or her and Eric's actions as LLC Members from proceeding to trial.
1. Counts I &II
Section 5.4.3 of the PET LLC Agreement requires each Member to understand and acknowledge that "the conduct of the Company's business may involve business dealings and undertakings with Members and their Affiliates. In any of those cases, those dealings and undertakings shall be at arm's length and on commercially reasonable terms." Section 5.4.1 of the same renders Peggy, as Manager, liable for any acts undertaken fraudulently, in bad faith, or which constitute gross negligence.
Tucker challenges numerous transactions and dealings by PET with Peggy and Eric, their companies, and their family members. Per the PET LLC Agreement, such transactions are required to be at arm's length and at commercially reasonable terms. For example, the jury in the 2016 Action found that the interest-free loan taken from PET by Peggy for the benefit of Eric and Tucker's siblings was a breach of her fiduciary duty, Cianchette, 2019 ME 87, ¶ 37, 209 A.3d 745, but Peggy has testified that the loan is still outstanding, and no interest is being charged. Tucker alleges Peggy and Eric have re-booked over a million dollars of their capital accounts as loans so that they can claim $150,890 in interest owed to them before Tucker is entitled to any compensation for his share of PET. The 2016 Action also found that Peggy and Eric breached their fiduciary duties by causing PET to pay excessive rent to their own real estate company, in the amount of $65,000 per month. The parties agree that PET continues to pay their company $65,000 per month in rent but dispute whether that amount is still purely for rent or also includes management fees. Also, Casco Bay Ford developed a commercial truck facility in Freeport on land owned by a real estate holding company owned by Eric and Tucker's siblings. This new facility may have generated additional profits affecting Casco Bay Ford's valuation, but its profitability has not been tracked and has not been factored into the business's valuation, which could have affected Tucker's compensation for his share of PET.
Management fees are also a subject of contention, as PET has, since 2017, paid Eric's company ELC more than $250,000 per year for management services carried out by Peggy and Eric's son Michael and by Samuel Brown, neither of whom have an office at Casco Bay Ford and neither of whom spends more than a few hours a week on site. The fee paid to ELC for these management services is twice the salary paid to Tucker for what he alleges were the same responsibilities as full-time, on-site General Manager. Casco Bay Ford has also paid ELC other sums whose purpose remains unclear, totaling $789,076.04 between December 2017 and April 2020.
In September 2018 Sam Brown of ELC sought recommendations from Casco Bay Ford's accountants about contacts for forming a reinsurance company which would provide a warranty program for the dealership's vehicles, enabling PET's Members to pay themselves the insurance premiums instead of sending them to the manufacturer. Brown was given the contact information of Bob Hunter. Hunter then set up reinsurance risk pools with Casco Bay Ford whose ownership was transferred to a separate company owned by Peggy and Eric. Casco Bay Ford makes payments to Hunter's companies or Peggy and Eric's company for its extended warranty contracts. It is a question of fact as to whether this violates the PET LLC Agreement.
Additionally, under section 4.1.2 of the PET LLC Agreement, cash flow for each taxable year must be distributed to interest holders no more than seventy-five days after year end. It was Peggy's responsibility as Manager to calculate and issue these distributions, but she did not do so at least in 2019 and Tucker did not receive a distribution in 2019.
Lastly, Casco Bay Ford pays Erik's Church, a restaurant owned by Peggy and Eric's son Kenneth, $2,000 per month as a sponsorship fee. The dealership does not have a similar arrangement with any other business and has no metrics about whether or how many customers have been generated by this form of advertising. Because Kenneth is their son, this is an insider transaction subject to the relevant provisions of the PET LLC Agreement.
Whether any or all of the above dealings meet the criteria of being arms-length transactions carried out on commercially reasonable terms and/or are violations of the LLC Operating Agreement are questions of fact which this Court cannot decide on summary judgment.
Moreover, under § 1522(2) of the LLC Act, "[n]otwithstanding any contrary provision of law, there exists an implied contractual covenant of good faith and fair dealing in every limited liability company agreement." Peggy, Eric, and Tucker are all bound by this covenant implied by the LLC Agreement. At the time PET was formed, it was the intention of all parties for Eric to fund the purchase of Casco Bay Ford and for Tucker to later buy him out, thereby becoming the sole owner of PET and of the dealership. On August 9, 2019 Peggy and Eric informed Tucker of their plans for a "capital transaction," i.e., the Merger, whereby PET would merge with another of Eric's companies, Better Way Ford, resulting in the termination of Tucker's ownership interest. Tucker claims this Merger is a breach of Peggy and Eric's covenant of good faith and fair dealing because, he alleges, it was intentionally structured so as to eliminate his interest, contrary to the common purpose and justified expectations of the parties at the time the LLC Agreement was signed. Whether their actions constitute a breach of the covenant is a question for a jury. Marquis v. Farm Family Mut. Ins. Co., 628 A.2d 644 (Me. 1993).
And as the Law Court has already explained, Peggy, as Manager of PET, owed and continues to owe fiduciary duties to the LLC Members, and a failure to act in good faith towards those Members would constitute a breach of these duties. Cianchette, 2019 ME 87, ¶ 37, 209 A.3d 745. Tucker alleges Peggy has not ceased the conduct already held to be a breach of her fiduciary duties, which is a cause of action independent of whether that conduct constitutes a breach of the Operating Agreement. Id. A factfinder must determine whether Peggy has continued her wrongful conduct.
2. Count III
Under Section 5.4.1 of the PET LLC Agreement, Peggy, as Manager, "shall not be liable, responsible, or accountable in damages or otherwise to the Company or to any Member for any action taken or any failure to act on behalf of the Company within the scope of the authority conferred on the Managers by this Agreement or by law, unless the action was taken or omission was made fraudulently or in bad faith or unless the action or omission constituted gross negligence." Her liability is limited, but not eliminated, by this LLC Agreement.
After Peggy fired Tucker as General Manager, the net profit of PET dropped by 97% under the management of Casco Bay Ford by ELC, Eric's management company, but Peggy did not consider making any changes to the management structure nor does she recall taking any other actions to improve profitability at the time. Tucker alleges these acts constitute gross negligence.
In 2013, Eric, Peggy, and Tucker purchased Casco Bay Ford, through PET, for $5.3 million. The current appraised value of the dealership is more than two million dollars less, at $3,208,000, a figure affected by the poor performance after Tucker's departure as General Manager. Defendants assert this is reasonable because the valuation is net of the loans they made to the company. It is a question of fact as to whether this valuation is accurate. Eric has stated he would not sell the dealership for its appraised value, or at any price. He and Peggy have testified that they believe the business has actually improved since they purchased it in 2013, yet they submit evidence that it is worth less. Peggy has stated that she does not believe the poor performance in 2017 and 2018 are not a fair representation of the dealership's profit potential. Tucker alleges it was a breach of Peggy and Eric's fiduciary duties to hold out this valuation opinion as fair in light of its use as a metric for valuing Tucker's own interest at $0.
3. Counts V-IX
The remaining counts of Tucker's complaint seek the specific remedies of declaratory judgment, disassociation, appointment of a receiver, injunctive relief, and punitive damages as to Peggy Cianchette. These remedies are based on continued and new wrongful conduct supported by properly alleged facts as detailed above. In particular, punitive damages are available to a plaintiff who proves "by clear and convincing evidence that the defendant acted with either express or implied malice." Tuttle v. Raymond, 494 A.2d 1353, 1363-64 (Me. 1985). Whether a defendant's conduct was motivated by actual ill will or could by its nature be inferred to be spurred by malice is a question of fact. Waxler v. Waxler, 1997 ME 190, ¶ 15, 699 A.2d 1161. Tucker alleges that Peggy's actions in the preceding counts were undertaken with express or implied malice towards him. Peggy has stated she bears him no ill will but Tucker points to her alleged continuation of conduct already found in the 2016 Action to be a breach of fiduciary duty as indicating that statement not to be credible. Moreover, because Tucker is seeking punitive damages for continued wrongful conduct since the 2016 Action, the fact that punitive damages were not awarded for similar conduct in the previous suit is irrelevant in terms of res judicata. Should it be determined at trial that Peggy disregarded the prior judgment and engaged in the same wrongful conduct, that in itself could imply malice. See Harris v. Soley, 2000 ME 150, ¶ 23, 756 A.2d 499. Because this Court is denying summary judgment on the preceding counts, it declines to resolve the issue of malice here, either.
CONCLUSION
Based on the foregoing, the entry will be: Defendants' motion to exclude is DENIED, Defendants' motion for judgment on the pleadings is GRANTED as to Counts 4 and 9, and the Defendants' motion for summary judgment is DENIED.
SO ORDERED.
The Clerk is requested to enter this Order on the Docket, incorporating it by reference pursuant to Civ. P. 79(a).